Diesel-driven cars may soon return to the streets of Hong Kong - and in a much cleaner and environment-friendly form, after being phased out in favour of petrol engines over a decade ago, motor traders say. They have started a global hunt for the right diesel model after the environmental watchdog introduced what they called an 'improved flexibility in vehicle emissions standards' last month. The new standard has led to some enthusiasm among the traders badly hit by the economic downturn as they expect diesel vehicles to be popular among cost-conscious drivers who will benefit from diesel prices lower than petrol. The traders said diesel engines were also a third more fuel-efficient than petrol ones, emitted less carbon dioxide, were more durable and could generate greater power. The Environmental Protection Department (EPD) recently rejected suggestions from the Hong Kong Motor Traders Association that Euro V emissions standards be adopted for diesel cars to facilitate imports, as diesel standards still lagged behind those for petrol cars. But the department has since dropped its insistence that imported diesel cars meet the latest Californian standards and associated testing procedures - adopted in Hong Kong in 2006 - which motor traders have said were 'virtually unattainable'. And it has said it is also prepared to accept diesel cars which meet or surpass Euro V emissions standards for petrol cars. The same applies to diesel cars which meet the Japanese emissions standard for 2009. The department has become more flexible in its requirements because the Euro V petrol car standards, with tightened curbs on nitrogen oxide emissions and new limits on particulate matter, have become broadly equivalent to Californian standards. 'It is still a very difficult task for us to find a diesel car that matches the standard of a petrol car, but there is a chance now at least that we can find something as we are now talking about configurations of European and Japanese vehicles, not the American ones which are totally different from ours,' Michael Lee, chairman of the Hong Kong Motor Traders Association, said. Diesel engines have in the past been unwelcome because of their pollution potential - smoky emissions with high levels of particulate matter known as a major health risk. Diesel engines also generated high levels of smog-inducing nitrogen oxides. To discourage their use, the government adopted the most stringent Californian standards from 1998 and now imposes vehicle licence fees on diesel vehicles up to 37 per cent higher than on petrol ones. But Hong Kong Automobile Association vice-president James Kong Yat-hung said the lower running cost of diesel cars would be attractive as the economy worsened. 'It's not only that diesel is cheaper than petrol, but diesel engines are also about 30 per cent more energy-efficient and durable than petrol engines,' he said. Diesel fuel costs HK$8.07 a litre, which is 38 per cent cheaper than petrol. Since late 2007, the government has also cut tax on diesel by half to 56 cents a litre. The EPD has said it would consider offering a tax concession on clean-running diesel cars - similar to that now offered to high-achieving petrol cars for outstanding environmental performance. The petrol-car concession is a 30 per cent cut in first-registration tax, or up to HK$50,000, if the vehicle emits half the emissions allowed under Euro IV standards and is 40 per cent more fuel-efficient than other cars of the same weight.